Wise Policy Frustrates Thai FX Users
A new policy from Wise in Thailand now auto-converts all incoming funds to Thai Baht. The change is frustrating exporters and other users who previously held foreign currencies like the euro to time their conversions for better exchange rates.
The policy shift at Wise, effective May 19, 2026, aligns the company with Bank of Thailand regulations as it begins operating under a local entity. This subjects it to Thai financial rules, including stricter oversight on foreign currency transactions aimed at managing Baht volatility. For exporters, this eliminates the ability to hold foreign currencies like EUR or USD, forcing immediate conversion to THB and removing strategic timing of currency exchange. This change introduces significant currency risk for businesses paid in euros. Forecasts for the Thai Baht to Euro (THB/EUR) exchange rate through 2026 are mixed, with some analysts predicting the Baht will soften to around 0.025500 against the euro, while others project it could strengthen. The inability to hold euros means exporters cannot wait for a more favorable rate, potentially impacting profit margins on shipments to Europe. Globally, the rice market is grappling with price fluctuations after India, the world's largest exporter, lifted its export ban on non-basmati white rice in late 2024 and fully returned to the market in March 2025. This move caused a 38-45% drop in prices for 5% broken rice from Vietnam and Thailand. In response, Thailand is pursuing talks with India and Vietnam to coordinate market strategies and stabilize prices. Simultaneously, the European Union, a key market for premium Thai rice, is preparing new import regulations effective January 1, 2027. This "safeguard mechanism" will trigger higher tariffs if rice import volumes from Asia significantly exceed historical averages, a measure designed to protect EU growers. While initial assessments suggest Thailand's export volumes may see limited impact, the policy adds a layer of regulatory uncertainty for market access. Demand in Europe is shifting toward premium, organic, and sustainably sourced rice, with the market projected to reach over USD 1 billion by 2033. Health-conscious consumers are driving growth in specialty varieties, creating opportunities for Thai exporters who can meet stringent traceability and certification requirements. This trend underscores the importance of branding and positioning based on quality rather than just price. In the Asia-Pacific region, demand for premium rice is also on the rise, driven by increasing disposable incomes. To strengthen its position, Thailand has secured new trade agreements, including a five-year deal signed in November 2025 to sell up to 100,000 tonnes of rice to Singapore, bolstering regional food security and trade ties.
